The Government has now made it mandatory for Nidhi companies to inform the authority about change in control of the organisation. This is part of additional disclosers required by these companies. Other information required includes details of collection centres and profit details.

These changes have been incorporated in the revised forms NDH-1 (return of statutory compliances), NDH-2 (application to Regional Director and intimation to the Registrar), NDH-3 (return for the half year ended) and NDH-4 (form for filing application for declaration as Nidhi company and for up-dation of status by Nidhis). With the issuance of a notification, new forms have been made effective from January 23.

Extension related information

“Has the company acquired another company by purchase of securities or controlled the composition of the Board of Directors of any other company in any manner whatsoever or entered into any arrangement for the change of its management,” one of the key additions in the form NDH-4 reads. Another provision is related with information related with extension.

Explaining changes, Moin Ladha, Partner with Khaitan & Co said that by way of the amendments, the MCA has updated the form filings to be done by a Nidhi company. Form NDH-1 has been amended to add the details of whether an application has been filed with regional director relating to extension of time regarding maintaining of ratio of net owned funds to  deposits.

Scope of revised forms

The scope of the revised forms has expanded to include confirmations regarding other extensions if any obtained. Details such as date of closure of branch, date of opening of branch, proposed date of closure of branch and date of closure of collection centres are to be provided. “Further, details of collection centres and profit details are also to be incorporated. Lastly a confirmation regarding any change in control or acquisition is now necessary,” he said.

Changes in the forms are big development after amendments in Nidhi rules last April. It was prescribed that that a public company incorporated as a Nidhi with a share capital of ₹10 lakh, needs to first get itself declared as a Nidhi from the Central government by applying in form NDH-4 with a minimum membership of 200 and NOF of ₹20 lakh within 120 days of its incorporation.

Criteria of fit

The Promoters and Directors of the company have to meet the criteria of fit and proper person as laid down in the rules. For timely disposal, it had also been provided in amended rules that in case no decision is conveyed by the Central government within 45 days of the receipt of applications filed by companies in form NDH-4, approval would be deemed as granted. This would apply for such companies which shall be incorporated after Nidhi (Amendment) Rules, 2022.

Explaining the rationale behind changes in rules, the government had said that Under the Companies Act, 1956, about 390 companies were declared as Nidhi companies only. During 2014-2019, more than ten thousand companies get incorporated. However, only about 2,300 companies have applied in form NDH-4 for declaration.